Mosing v. Domas

• Decision Date: 15 October 2002
• Docket Number: No. 2002-C-0012.,2002-C-0012.
• Citation: 830 So.2d 967
• Parties: Donald Eugene MOSING, Dariel Parker Mosing, and Frank's Casing Crew & Rental Tools, Inc. v. Kirk P. DOMAS and Automotive Casualty Insurance Company. Donald Eugene Mosing, Dariel Parker Mosing, and Frank's Casing Crew & Rental Tools, Inc. v. Stonewall Surplus Lines Insurance Company.
• Court: Louisiana Supreme Court

830 So.2d 967

Donald Eugene MOSING, Dariel Parker Mosing, and Frank's Casing Crew & Rental Tools, Inc. v. Kirk P. DOMAS and Automotive Casualty Insurance Company.

Donald Eugene Mosing, Dariel Parker Mosing, and Frank's Casing Crew & Rental Tools, Inc. v. Stonewall Surplus Lines Insurance Company.

No. 2002-C-0012.

Supreme Court of Louisiana.

October 15, 2002.

Rehearing Denied December 13, 2002.

WEIMER, Justice.

We granted this writ to review the propriety of an award of $500,000.00 in exemplary damages assessed against an intoxicated driver pursuant to LSA-C.C. art. 2315.4. In doing so, we consider the appropriate standard of review to apply in evaluating the amount of exemplary damages awarded by a jury or trial court in light of the recent decision of the U.S. Supreme Court in Cooper Industries, Inc. v. Leatherman Tool Group, Inc., 532 U.S. 424, 121 S.Ct. 1678, 149 L.Ed.2d 674 (2001), which requires de novo review of exemplary damage awards challenged as being excessive under the Due Process Clause of the Fourteenth Amendment to the United States Constitution. Finding that the defendant failed to raise a federal constitutional due process challenge to the amount of the exemplary damage award in this case, we apply state standards to determine the excessiveness of the award. Applying those standards, we conclude that the jury did not abuse its discretion in awarding the plaintiffs $500,000.00 in exemplary damages and affirm the decision of the court below.

FACTS AND PROCEDURAL HISTORY

On September 4, 1990, Donald Mosing, president and CEO of Frank's Casing Crew & Rental Tools, Inc., was driving a company-owned 1990 Pontiac Bonneville on Roselawn Boulevard in Lafayette, Louisiana, when a 1988 Toyota Supra driven by Kirk Domas ran a stop sign at the intersection of Leon Drive and Roselawn Boulevard, striking Mosing's vehicle broadside. Domas was intoxicated. Having previously been cited for multiple DWI's for which his driver's license had been suspended, Domas was proceeding at a high rate of speed through the quiet residential neighborhood in an effort to flee another accident he had caused just minutes earlier on Johnston Street. After striking Mosing's vehicle, Domas fled the scene of this accident on foot. He was apprehended by police a short time thereafter. Dariel Mosing arrived at the accident scene minutes after the impact and, upon seeing the condition of her husband, feared that he was dead or mortally wounded.

The Mosings filed suit against Domas and his vehicle's insurer, Automotive Casualty Insurance Company, seeking compensatory and exemplary damages. Although the vehicle Mr. Mosing was driving was insured under a business auto liability policy issued by Stonewall Surplus Lines Insurance Company, UM coverage on the policy had been rejected. Mr. Mosing's personal vehicle was insured by Aetna Casualty and Insurance Company, and that policy provided UM coverage. Accordingly, the Mosings amended their petition to add Aetna as an additional defendant. Pursuant to a motion for summary judgment, the trial court decreed that Aetna's UM policy provided coverage for punitive damages. Domas' insurer, Automotive Casualty, became insolvent, and on August 12, 1994, the Louisiana Insurance Guaranty Association (LIGA) was added as a defendant in its stead.

On December 8, 1997, approximately seven years after suit was originally instituted, Aetna (now Travelers)¹ filed a motion for summary judgment asserting that Frank's Casing Crew & Rental Tools, Inc.'s rejection of UM coverage in the Stonewall policy was invalid. Following a contradictory hearing, the trial court granted the motion for summary judgment. The court found that Stonewall's policy did not effect a valid waiver of UM coverage and that, as a result, Stonewall provided UM coverage for the vehicle operated by Mosing on the date of the accident.

The Mosings filed a separate suit against Stonewall, alleging that it was liable for damages if the UM rejection form contained in the policy issued to Frank's Casing Crew & Rental Tools, Inc. was invalid. This suit was consolidated with the suit against Domas, LIGA, and Travelers. Stonewall filed a Motion to Reconsider and/or for Summary Judgment requesting that the trial court reexamine its ruling with respect to the validity of its UM rejection form. Stonewall's motion was denied. Thereafter, the Mosings settled their claims against Stonewall, dismissing their action against the insurer with prejudice.

The case came for trial on June 26, 2000. Prior to the selection of the jury, Travelers filed a motion for summary judgment seeking dismissal from the suit on the grounds that: (1) its coverage would not be triggered unless the Mosings' compensatory and exemplary damage claims exceeded Stonewall's UM policy limits; (2) the Stonewall policy issued to Frank's Casing Crew & Rental Tools, Inc. provided $1,000,000.00 in coverage; (3) Travelers had previously made an unconditional tender of $20,000.00; and, (4) the evidence did not support an award exceeding $1,020,000.00. After the Mosings stipulated that their claims did not exceed $1,000,000.00, the trial court granted the summary judgment, dismissing the Mosings' claims against Travelers with prejudice. The case proceeded to trial against the remaining defendant, Domas, who failed to appear for trial.

Following the jury trial, a verdict was rendered in favor of the Mosings and against Domas, awarding Mr. Mosing $30,084.00 in general damages and medical expenses; Mrs. Mosing $10,000.00 for loss of consortium; Frank's Casing Crew & Rental Tool, Inc. $15,475.00 for property damage to the vehicle; and Mr. and Mrs. Mosing $500,000.00 in exemplary damages. Judgment was signed on June 30, 2000. Thereafter, two appeals were filed. The Mosings appealed the interlocutory rulings of the trial court: (1) holding that the UM rejection form executed by Frank's Casing Crew & Rental Tools, Inc. was invalid and that the policy issued by Stonewall provided UM coverage; and (2) dismissing Travelers from the lawsuit based on the coverage provided by Stonewall. Travelers appealed the interlocutory judgment of the trial court holding that its policy provided coverage for exemplary damages and the final judgment on the merits, signed June 30, 2000.

The Third Circuit Court of Appeal rendered its opinion on October 3, 2001. Mosing v. Domas, XXXX-XXXX (La.App. 3 Cir. 10/3/01), 798 So.2d 1105. It affirmed the judgment below in part and reversed in part. It reversed the judgment of the trial court invalidating the rejection of UM coverage in the policy issued to Frank's Casing Crew & Rental Tools, Inc. by Stonewall. It affirmed the finding that Travelers' UM policy provided coverage for exemplary damages, and it affirmed the award of $500,000.00 in exemplary damages. The effect of the Court of Appeal judgment was to place Travelers in the position of primary UM insurer and render it liable for the entire amount of the judgment, since Domas was grossly underinsured.

Travelers immediately applied for a rehearing from the Court of Appeal's decision, arguing that the Court of Appeal applied the wrong standard of review in affirming the amount of the exemplary damage award, that the amount of the award is constitutionally excessive, and that the judgment below erroneously awarded interest on the exemplary damage award from the date of judicial demand rather than from date of judgment. Rehearing was denied on November 28, 2001.

We granted certiorari to consider Travelers' contention that the $500,000.00 exemplary damage award is excessive. Mosing v. Domas, XXXX-XXXX (La.4/26/02), 813 So.2d 1095.

STANDARD OF REVIEW

Our analysis begins with a consideration of the appropriate standard of review to apply in reviewing the amount of exemplary damages awarded by a jury or trial court. Historically, in Louisiana, the amount of an exemplary damage award has been reviewed by the appellate courts for abuse of discretion. Demarest v. Progressive American Ins. Co., 552 So.2d 1329, 1334 (La.App. 5 Cir.1989); Jordan v. Intercontinental Bulktank Corp., 621 So.2d 1141, 1157 (La.App. 1 Cir.1993), writ denied, 623 So.2d 1335, 1336 (La.1993); Angeron v. Martin, 93-2381 (La.App. 1 Cir. 12/22/94), 649 So.2d 40, 44; Riser v. Acadiana Limousine Service, Inc., 96-1687 (La.App. 3 Cir. 4/30/97), 693 So.2d 330, 340, writ denied, 97-1420 (La.9/19/97), 701 So.2d 173; Dekeyser v. Automotive Cas. Ins. Co., 97-1251 (La.App. 4 Cir. 2/04/98), 706 So.2d 676, 687. This practice is similar to the one that has evolved under the common law.

Under the traditional common law model which has existed for nearly 240 years, juries have possessed vast discretion to determine the amount of exemplary damages necessary to inflict proper retribution and deterrence upon defendants who have committed particularly egregious torts. See Murphy, Punitive Damages, Explanatory Verdicts, and the Hard Look, 76 Wash.L.Rev. 995, 1002 (Oct.2001). Judicial interference with such awards has been typically reserved for the "glaring case ... of outrageous damages," one which "all mankind at first blush" would find outrageous. Honda Motor Co., Ltd. v. Oberg, 512 U.S. 415, 421-422, 114 S.Ct. 2331, 2335-2336, 129 L.Ed.2d 336 (1994), quoting Huckle v. Money, 2 Wils. 205, 95 Eng.Rep. 768 (C.P.1763).

In recent years, the U.S. Supreme Court has decided a number of cases raising exemplary damages issues. Most significantly, in BMW of North America, Inc. v. Gore, 517 U.S. 559, 116 S.Ct. 1589, 134 L.Ed.2d 809 (1996), the Court ruled that exemplary damage awards that are "grossly excessive" violate the Due Process Clause of the Fourteenth Amendment. The Court then provided three "guideposts" for gauging when an exemplary damage award crosses the constitutional line: (1) the reprehensibility of the defendant's conduct; (2) the ratio between the exemplary damage award and the harm the defendant's conduct caused, or could have caused; and (3) the size...